AML Policy

Money laundering is, in simple terms, the “conversion of criminal incomes into assets that cannot be traced back to the underlying crime”. In other words, it entails the concealing of the nature, source, location or movement of the proceeds of crime so as to obscure the unlawfulness thereof in order for it to be used without arousing suspicion. “Proceeds of crime” includes any asset, cash or otherwise, which is acquired by means of the commission of any criminal offence. The objective of money laundering is thus to conceal the proceeds of crime in order for the offender to circumvent prosecution whilst being able to utilise as much of the said proceeds of crime as possible.

Money laundering is conventionally divided into three stages, namely placement, layering, and integration. Placement is the first stage in the process and comprises the displacement of funds obtained by means of illegal activities to a location or in a form that is less suspicious to law enforcement authorities and more expedient to the criminal offender. Once that has been done, the proceeds are channelled into financial institutions or the retail economy. The second phase is layering. This entails the severance of proceeds from their unlawful origin by making use of several intricate financial transactions to obscure the audit trail and conceal the proceeds, usually by passing such proceeds through various institutions and jurisdictions in order to disguise the origin thereof. The final stage in the process is incorporation into an economy, during which unlawful proceeds are converted into seemingly lawful business earnings by means of ordinary financial or commercial operations.

Money laundering is criminalised in South Africa by the Prevention of Organised Crime Act 121 of 1998. Typical money laundering methods which are pertinent to this discussion are structuring and EFTs. Structuring, also known as “smurfing”, entails the splitting of a large financial transaction into several smaller transactions. This is typically done by dividing cash deposits into amounts below a minimum limit above which banks are required to report financial transactions, known as threshold amounts. Couriers or so-called “smurfs” then make these deposits into several different bank accounts, often at different banks. This is done in order to avoid detection by authorities. EFTs are also prime tools for laundering money. This transaction entails the transferring of the control of funds from one institution to another by sending a notification electronically.

Such transfers are especially popular in the layering stage, since funds can be transferred through various different institutions in different jurisdictions in order to obscure the trail to the origin of the funds. Transfers can also be made from several different bank accounts into which deposits have been made by “smurfing” to a single collecting account, which will usually be located abroad in an offshore financial centre.

SOUTH AFRICA’S AML LEGAL AND REGULATORY FRAMEWORK (The AML regime is set out in the following legislation and regulations)

The Financial Action Task Force Recommendations;

Prevention of Organised Crime Act 121 of 1998;

Financial Intelligence Centre Act 38 of 2001;

Banks Act 94 of 1990;

Financial Intelligence Centre Amendment Act 11 of 2008;

South African Reserve Bank Act 90 of 1989.

ICE3X ANTI-MONEY LAUNDERING (AML) POLICY

The ICE3X AML Policy is designed to prevent money laundering by meeting the SOUTH AFRICAN AML legislation obligations including the need to have adequate systems and controls in place to mitigate the risk of the firm being used to facilitate financial crime.

This AML Policy sets out the minimum standards which must be complied with and includes:

The appointment of a Money Laundering Reporting Officer (MLRO) who has sufficient level of seniority and independence and who has responsibility for oversight of compliance with relevant legislation, regulations, rules and industry guidance;

Establishing and maintaining a Risk Based Approach (RBA) towards assessing and managing the money laundering and terrorist financing risks to the company;

Establishing and maintaining risk based systems and procedures to monitor on-going customer activity;

Procedures for reporting suspicious activity internally and to the relevant law enforcement authorities as appropriate;

The maintenance of appropriate records for the minimum prescribed periods;
Training and awareness for all relevant employees.

SANCTIONS POLICY

ICE3X is prohibited from transacting with individuals, companies and countries that are on prescribed Sanctions lists. ICE3X will therefore screen against South African Reserve Bank, United Nations, European Union, UK Treasury and US Office of Foreign Assets Control (OFAC) sanctions lists in all jurisdictions in which we operate.